Does word Realty in a business name get you in trouble?

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Does word Realty in a business name get you in trouble?

Cathy M.
Rental Property Investor · Newalla, OK · Member since 2015 · 7 posts · 2 votes

I'm wanting to start an LLC. The name I picked out has the word realty in it. I am not a licensed realtor. People are telling me I would get in trouble with the state real estate commission if I use the word realty or real estate in my business name. How in the world am I supposed to let people know what kind of business I have if the name does not imply I deal in real estate.

Would I in fact get in trouble with the state real estate commission if I use the word "realty" in my business? Isn't a business name supposed to let people know what kind of business you are?

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Russell BrazilBusiness Member
Moderator
Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
9y
Originally posted by @Edward B.:

@Chinmay J., I'm a licensed agent, not a Realtor, as well and I swear I saw it somewhere but I can't find it in the VA Real Estate Regulations nor Title 54.1 Ch 21 of the Code of VA so maybe your lawyer is right. I'll keep looking because it is gonna bug me until I find out for sure.

 It's very important to note that many things that are illegal are not found in the law as written by a legislative body. This information usually comes in the form of guidance memos issued by the appropriate government agency, so trying to search for something like this on the internet is typically not going to yield results. This extends not just to guidance memos from real estate commissions but from any government agency. The laymen though thinks that anything governed by law is found in the law as the legislature writes it, (which is easy to fund) but that's simply not the case. Also much of what is law is found in case law issued by the courts, which is also hard to find.

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  • Russell BrazilBusiness Member
    Moderator
    Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
    9y

    In many states the word Realty is not allowed unless you are a brokerage providing realty services. Not sure if that is the case in Oklahoma, but I bet that if someone told you that is very likely true as it is true in many states including the multiple ones I do business in.

    Realty in the business sense refers to the services of buying, selling, leasing and management of real estate...so to use that name ifnyoi are not providing the services of a real estate brokerage would be misleading to the public. The primary objective of most real estate commissions is to protect the public, thus why they restrict the use of certain words for businesses.

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  • Jon Pitcher
    Property Manager · Oklahoma City, OK · Member since 2016 · 87 posts · 69 votes
    9y

    @Cathy M.

    I can't find any statute prohibiting the use of the word "realty" in a business name in Oklahoma.  However, I called the Real Estate Commission this morning and they told me they don't allow it. That said, I'm not sure the Real Estate Commission has any authority over you, as a non-broker, unless you are engaging in activities that require a real estate license.  But the safest and easiest thing to do would be to use the word "properties" or "investments" instead of "realty".  

    I do think people commonly associate the word "realty" with real estate brokerage services, even if that isn't the literal meaning of the word, so I can see why the commission doesn't want you to use it.

    If you are engaging in wholesaling or similar activity, I would strongly recommend not using the word "realty" in your business name.  If you are just buying and holding properties for yourself, you probably wouldn't get in trouble.  But I don't see any reason to take the chance.

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  • Chinmay J.
    Investor · Northern, VA · Member since 2016 · 1k+ posts · 904 votes
    9y
    Originally posted by @Cathy M.:

    I'm wanting to start an LLC. The name I picked out has the word realty in it. I am not a licensed realtor. People are telling me I would get in trouble with the state real estate commission if I use the word realty or real estate in my business name. How in the world am I supposed to let people know what kind of business I have if the name does not imply I deal in real estate.

    Would I in fact get in trouble with the state real estate commission if I use the word "realty" in my business? Isn't a business name supposed to let people know what kind of business you are?

    What is the purpose of the LLC? Why is it necessary for the whole world to know that you are dealing in real estate? Is that for the purposes of advertising or you think that's necessary to have a successful business? If you think it's latter, then that's simply not the case. Your Operating Agreement can have the details of your business - your name can be as generic as say... Modena Investments for example.

    What @Russell Brazil says is right. Certain states prohibit use of Realty or Real Estate in name of the business unless you have specific licenses and are brokers. I was told by an attorney that Virginia is not one of them. You might want to consult a RE attorney in your state if you are insisting on having the word in the name of your LLC. But if I were you, I would just keep something generic and move on to actually working on a deal.

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  • Edward B.
    Investor · Midlothian, VA · Member since 2015 · 980 posts · 823 votes
    9y

    @Chinmay J.,

    You might want to double check that, I'm almost certain that VA does not allow you to use those terms unless you are licensed.

    @Cathy M., there are typically many words that you cannot use because it would imply that you are licensed or registered to do something that you are not, i.e. you cannot use the word "bank" in your name unless you are indeed registered as a bank.

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  • Chinmay J.
    Investor · Northern, VA · Member since 2016 · 1k+ posts · 904 votes
    9y
    Originally posted by @Edward B.:

    @Chinmay J.,

    You might want to double check that, I'm almost certain that VA does not allow you to use those terms unless you are licensed.

    @Cathy M., there are typically many words that you cannot use because it would imply that you are licensed or registered to do something that you are not, i.e. you cannot use the word "bank" in your name unless you are indeed registered as a bank.

    Well I am licensed realtor. So the advice the lawyer was giving to me was to me specifically. But I am not a licensed Broker. In VA there is a distinction between broker and a realtor.

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  • Edward B.
    Investor · Midlothian, VA · Member since 2015 · 980 posts · 823 votes
    9y

    @Chinmay J., I'm a licensed agent, not a Realtor, as well and I swear I saw it somewhere but I can't find it in the VA Real Estate Regulations nor Title 54.1 Ch 21 of the Code of VA so maybe your lawyer is right. I'll keep looking because it is gonna bug me until I find out for sure.

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  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    9y

    @Russell Brazil  in our state to use Realty you have to be licensed and a member of the board of realtors its the board of realtors that control that moniker in our area.

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  • Russell BrazilBusiness Member
    Moderator
    Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
    9y
    Originally posted by @Edward B.:

    @Chinmay J., I'm a licensed agent, not a Realtor, as well and I swear I saw it somewhere but I can't find it in the VA Real Estate Regulations nor Title 54.1 Ch 21 of the Code of VA so maybe your lawyer is right. I'll keep looking because it is gonna bug me until I find out for sure.

     It's very important to note that many things that are illegal are not found in the law as written by a legislative body. This information usually comes in the form of guidance memos issued by the appropriate government agency, so trying to search for something like this on the internet is typically not going to yield results. This extends not just to guidance memos from real estate commissions but from any government agency. The laymen though thinks that anything governed by law is found in the law as the legislature writes it, (which is easy to fund) but that's simply not the case. Also much of what is law is found in case law issued by the courts, which is also hard to find.

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  • Edward B.
    Investor · Midlothian, VA · Member since 2015 · 980 posts · 823 votes
    9y

    @Russell Brazil, I'm tracking that but figured it was a good place to start. Like I said, I'm pretty sure I saw it someplace, just need to run it down.

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  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    9y

    @Russell Brazil  if the laws were written out in long hand and easily obtainable we would not need nearly as many lawyers  :)

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  • Chinmay J.
    Investor · Northern, VA · Member since 2016 · 1k+ posts · 904 votes
    9y
    Originally posted by @Edward B.:

    @Chinmay J., I'm a licensed agent, not a Realtor, as well and I swear I saw it somewhere but I can't find it in the VA Real Estate Regulations nor Title 54.1 Ch 21 of the Code of VA so maybe your lawyer is right. I'll keep looking because it is gonna bug me until I find out for sure.

    What do you mean you are a licensed agent not a realtor. My understanding is that the words are used interchangeably. 

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  • Edward B.
    Investor · Midlothian, VA · Member since 2015 · 980 posts · 823 votes
    9y

    @Chinmay J.

    "State requirements vary, but in all states you must take a minimum number of classes and pass a test to earn your license. REALTOR®: A real estate agent who is a member of the National Association of REALTORS®, which means that he or she must uphold the standards of the association and its code of ethics."

    If you are not a member of the National Association of Realtors you are not supposed to use their trademarked name. They are rather particular about that.

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  • Chinmay J.
    Investor · Northern, VA · Member since 2016 · 1k+ posts · 904 votes
    9y
    Originally posted by @Edward B.:

    @Chinmay J.

    "State requirements vary, but in all states you must take a minimum number of classes and pass a test to earn your license. REALTOR®: A real estate agent who is a member of the National Association of REALTORS®, which means that he or she must uphold the standards of the association and its code of ethics."

    If you are not a member of the National Association of Realtors you are not supposed to use their trademarked name. They are rather particular about that.

    So, by stating that you are a licensed agent, and not a REALTOR, you are stating that you have your license, have passed the exam, but are not member of NAR. Are you a member of any local area associations? My understanding is that by being member of local associations (DAR or NVAR in my area) automatically extends your membership to state and national association.

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  • Mike CumbieBusiness Member
    REALTOR® · Brockport, NY · Member since 2015 · 3k+ posts · 4k+ votes
    9y

    Hi @Chinmay J.

    All REALTORS®: are Licensed agents but not all agents are REALTORS®: To get your license typically it is a couple hundred dollars (Which is why I don't understand why wholesalers play in the gray legal area instead of just getting their license). To join the local board and become a REALTOR®: typically it is a lot more and you pay dues every year.

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  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    9y

    @Edward B. yes my mistake NAR not local board.. we have to be member of local board to get MLS access Phew hard to keep up?

    also in our state if you have any kind of name that indicates lending financing  funding etc.. you need special permission by the state finance regulators..

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  • Edward B.
    Investor · Midlothian, VA · Member since 2015 · 980 posts · 823 votes
    9y

    @Chinmay J., not sure about your area, but it does not always automatically extend that I know of. Regardless, I only use my license to facilitate my investing (MLS access, make my own offers, list my own properties, access properties myself, etc.). I do not represent buyers and sellers so the added fees of NAR membership is not worthwhile to me right now.

    To get this thread back on course, the only thing I can find right now is this from the VA State Corporation Commission website: "A result that a proposed name is distinguishable is not the equivalent of a determination that it is acceptable. For example, an acceptable proposed name must include an appropriate entity designator (e.g., "LLC"), if required, and may not include words and designations that imply the business entity will engage in a particular business activity, unless it will actually conduct such business (e.g., "bank"), or words that are prohibited by law."

    Since real estate brokering is a highly regulated area I am sure that somewhere in my training that was interpreted to mean that you can not use terms such as "realty, real estate" etc in your business name unless you are licensed to practice real estate. I imagine that most states have similar language. So @Cathy M., all states are different but it wouldn't surprise me if those are restricted terms in OK business names, especially if you are not licensed, because it would imply that you are licensed to practice real estate.

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  • Chinmay J.
    Investor · Northern, VA · Member since 2016 · 1k+ posts · 904 votes
    9y
    Originally posted by @Mike Cumbie:

    Hi @Chinmay J.

    All REALTORS®: are Licensed agents but not all agents are REALTORS®: To get your license typically it is a couple hundred dollars (Which is why I don't understand why wholesalers play in the gray legal area instead of just getting their license). To join the local board and become a REALTOR®: typically it is a lot more and you pay dues every year.

    Yes, Thanks.. you are right. I stand corrected. So my statement that the words are interchangeable was not correct. 

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  • Karl Mengers
    Real Estate Agent · Mustang, OK · Member since 2016 · 17 posts · 7 votes
    9y

    As an investor, Realtor, and Broker, I can assure you that it would not be wise to use realty in the name. It could be seen as practicing real estate without a license by OREC. I don't even allow my agents to use the term unless they register it with my office and with OREC.

    Realty as a word will only cause you grief in the future. Anybody can turn in anybody to OREC and sellers who think you are a Realtor (even if implied) will turn you in, in a heartbeat.

    I'd also not get hung up on a name for the LLC. Just go out and do a deal and use a simple LLC name to start.

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  • John Thedford
    Real Estate Broker · Naples, FL · Member since 2013 · 9k+ posts · 6k+ votes
    9y

    Keep in mind that although the use of the word "realty" may not be prohibited, generally speaking representing others for a commission is the practice of real estate. If you started a company called "xxx real estate" in which you put your holdings, I do not believe that in itself constitutes a breach of law as long as you are not holding yourself out to the public as performing services for others. If you put your holdings in "sss realty", would that be holding yourself out to the public as performing services for others? You might want to get a WRITTEN clarification from your state asking using these specific examples and explaining whether you intend to represent others or just yourself. BTW, asking questions BEFORE taking action is the smart way to stay within the law!

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  • Sam Shueh
    Real Estate Agent · Cupertino, CA · Member since 2016 · 4k+ posts · 1k+ votes
    9y

    Realtor and realty are trade marks per NAR.

    You can get a complaint from NAR. Suggest one that is less suspicious.

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  • Tom Parris
    Realtor · Tampa, FL · Member since 2016 · 340 posts · 248 votes
    9y

    Whether you get in trouble or not, you're setting yourself up for a lot of questions, and really unnecessary headache, answering the question as to why you don't broker deals, yet have the name Realty in your business. Name it something else, and if the name is vague and doesn't directly explain your business, it gives you an opportunity to explain it through an elevator pitch.  

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  • Marty True
    Rental Property Investor · Miami Beach, FL · Member since 2015 · 227 posts · 106 votes
    7y

    The word "realty" is not a trademark. You can use the word realty in your business name and in your website domain name.

    You cannot however, use the word "Realtor®" or "Realtors®" or "Realtor-Associates®" (unless they apply to you and your company) as those marks are registered with the United States Patent and Trademark Office.

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  • Rebekah Hart
    Member since 2023 · 2 posts · 0 votes
    3y
    Quote from @Marty True:

    The word "realty" is not a trademark. You can use the word realty in your business name and in your website domain name.

    You cannot however, use the word "Realtor®" or "Realtors®" or "Realtor-Associates®" (unless they apply to you and your company) as those marks are registered with the United States Patent and Trademark Office.


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  • Rebekah Hart
    Member since 2023 · 2 posts · 0 votes
    3y

    @Marty True


    This is the same thing I'm understanding upon research. The word "Realty" is not trademark so I'll definitely be using it my LLC.

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